So you have decided to start buying circulated U.S. 90 percent silver coins also known as "junk" silver. You stop in at a local coin shop you've passed by many times before and tell the dealer you have $1000 and want to purchase some old U.S. silver coins. So the dealer takes out a box containing dimes, quarters and half-dollars, all dated 1964 or before, and begins counting out your coins. As the dealer is doing this, s/he explains that the current spot price of silver is $18.00 and their current price of selling junk silver is 14 times the face value. And it turns out your $1000 fiat currency will get you about $71.40 in junk silver.
At this point you might be thinking "this dealer is scamming me, I thought $1000 would get me more silver coins than that". Actually this "deal" isn't bad at all. Even if the dealer was charging 15 times face value, it would be fair. So how can you be prepared to spot a fair deal from a bad one prior to visiting the dealer? Here is what you need to know...
It is generally recognized that a $1000 bag of 10,000 circulated silver dimes, 4,000 circulated silver quarters or 2,000 circulated silver half-dollars contains 715 ounces of silver. With a spot silver price of $18.00, the silver value of that bag is $18 times 715 or $12,870. Divide the $12,870 by the bag's $1000 face value and the result is $12.87. So for each $12.87 of fiat money you would receive $1.00 of silver coins - but only if the dealer was running a non-profit company. Since the dealer has a right to make a decent profit, 14 times face would be generous for such a small transaction (far less than a full bag) and 15 times would be more like it. If you were selling silver coins to a dealer with the 12.87 times face value, the dealer might offer you 11 times face as the spread would help them stay in business.
If you are offered uncirculated silver coins at multiples times face, such as rolls of Brilliant Uncirculated Franklin or 1964 Kennedy half dollars, the amount of silver in an uncirculated $1000 bag is approximately 725 ounces so use this number instead of 715. Or you might come across some 40 percent silver clad Kennedy half dollars minted for circulation (business strikes) from 1965-1969. Although not as desireable as 90 percent silver coins, if the price is right get the silver. A $1000 bag of silver clad Kennedys contains approximately 300 ounces of silver (each coin contains .1479 ounces of silver). I have never seen Morgan or Peace silver dollars offered at multiples times face but that doesn't mean offers like that don't exist. A $1000 bag of circulated Morgan or Peace dollars is considered to contain 765 ounces of silver with uncirculated silver dollars at approximately 780 ounces (each uncirculated Morgan or Peace dollar contains .77344 ounces of silver).
You can find lots of information on U.S. and Canadian silver coins in my ebooks The Last 90 Percent Silver U.S. Coins and The Last 80 Percent Silver Canadian Coins.
Thanks for reading. JA